We find the market’s view that the world can emerge from the pandemic as if nothing ever happened to be preposterous. There will be lasting damage as COVID-19 appears set to continue wreaking havoc through the spring. For example, many of the unemployed won’t have jobs to come back to, while the longer they remain out of work, the more their skills erode.

In addition, beyond the pandemic are a host of risks that could threaten the financial system. Foremost is the massive debt that has been issued since the global financial crisis and that has accelerated with the pandemic.

Gold Should Still Be In Your Portfolio

The traditional 60% stock / 40% bond portfolio no longer works when interest rates are at zero. Many investors are seeking alternatives to generate the returns that are missing in their bond allocation. Gold, private equity and bitcoin are among the limited number of alternative asset classes to choose from. Gold is the only one with an established history as a store of wealth and hedge against tail risks.

MVIS Global Junior Gold Miners Index


Source: MV Index Solutions GmbH.  All values are rebased to 1000. Data as of 30 November 2020.

About the Author:

Joe Foster has been Portfolio Manager for the VanEck International Investors Gold Fund since 1998 and the VanEck – Global Gold UCITS Fund since 2012. Mr. Foster, an acknowledged authority on gold, has over 10 years of dedicated experience in geology and mining including as a gold geologist in Nevada. He has appeared in The Wall Street Journal, Financial Times, Barron's, and on Reuters, CNBC and Bloomberg TV. Mr. Foster has also published articles in a number of mining journals, including Mining Engineering and Geological Society of Nevada.

The article above is an opinion of the author and does not necessarily reflect the opinion of MV Index Solutions or its affiliates.